Earnings Release FY24 Q1

Intelligent Cloud

Revenue increased $3.9 billion or 19%.

• Server products and cloud services revenue increased $3.9 billion or 21% driven by Azure and other cloud services. Azure and other cloud services revenue grew 29% driven by growth in our consumption-based services. Server products revenue increased 2% driven by demand for Windows Server and SQL Server running in multi-cloud environments, offset in part by continued customer shift to cloud offerings.

• Enterprise and partner services revenue increased $15 million or 1% driven by growth in Enterprise Support Services, offset in part by a decline in Industry Solutions.

Operating income increased $2.8 billion or 31%.

• Gross margin increased $2.9 billion or 20% driven by growth in Azure and other cloud services. Gross margin percentage increased slightly. Excluding the impact of the change in accounting estimate, gross margin percentage increased 2 points driven by improvement in Azure and other cloud services.

• Operating expenses increased $86 million or 2% driven by investments in Azure and other cloud services.

IMPORTANT NOTICE TO USERS (summary only, click here for full text of notice); All information is unaudited unless otherwise noted or accompanied by an audit opinion and is subject to the more comprehensive information contained in our SEC reports and filings. We do not endorse third-party information. All information speaks as of the last fiscal quarter or year for which we have filed a Form 10-K or 10-Q, or for historical information the date or period expressly indicated in or with such information. We undertake no duty to update the information. Forward-looking statements are subject to risks and uncertainties described in our Forms 10-Q and 10-K.